CCP Clears Lotte Chemical’s Purchase of Engro Polymer Stake After Phase-I Review
The Lotte Chemical Engro Polymer deal has been cleared by the Competition Commission of Pakistan, approving Lotte Chemical Pakistan’s proposed acquisition of a shareholding in Engro Polymer & Chemicals (EPCL) from Engro Corporation.
The commission announced on October 20, as first reported by ProPakistani, that its Phase-I assessment under the Competition Act 2010 found the transaction unlikely to substantially reduce competition or create a dominant market position. It authorised the deal under Section 31(1)(d)(i) of the Act. The same approval was also covered in detail by Business Recorder.
Lotte Chemical Pakistan (PSX: LOTCHEM) manufactures and supplies purified terephthalic acid (PTA), a raw material used mainly to produce polyester and PET. Engro Polymer (PSX: EPCL) manufactures polyvinyl chloride (PVC), caustic soda, hydrogen peroxide and other chlor-alkali products.
Why the CCP cleared the Lotte Chemical Engro Polymer deal
The commission assessed the transaction across three product markets: PVC, caustic soda and hydrogen peroxide. It treated Pakistan as the relevant geographic market.
Its review found that Lotte Chemical Pakistan does not operate in any of these markets. It also found that neither Lotte Chemical nor its associated, affiliated or group companies purchase products from Engro Polymer.
The proposed transaction therefore creates no horizontal or vertical overlap between the two companies. That finding drove the approval.
The PVC angle matters
The assessment confirmed that Engro Polymer is Pakistan’s only domestic manufacturer of PVC. However, the CCP said imports provide an important source of competition in the market.
In caustic soda and hydrogen peroxide, Engro Polymer holds comparatively smaller market shares and faces competition from other participants. The commission concluded that the deal would change Engro Polymer’s ownership and control, but would not by itself increase the company’s production capacity, sales or output.
The approval allows the ownership change to proceed from the competition-law perspective. The CCP stressed that the transaction does not increase market concentration or create barriers to entry.
The Rs19.7 billion deal behind the approval
This approval follows the share purchase agreement signed in September, when Engro Holdings agreed to sell its entire shareholding in Engro Polymer — about 56.19% of the issued and paid-up capital — to Lotte Chemical Pakistan for approximately Rs19.7 billion, or Rs38.6 per share. The PSX disclosure dated September 1, 2026 said completion remained subject to corporate and regulatory approvals.
That sale marked Engro’s exit from a business it has held since 1997. EPCL is Pakistan’s only integrated chlor-vinyl complex, and the deal came as part of Engro Group’s portfolio reshaping after its 2025 restructuring.
With the CCP now satisfied, the transaction clears its main regulatory hurdle from the competition side. The PSX-listed players involved — LOTCHEM, EPCL and ENGRO — are among the market’s most watched stocks, and the KSE-100’s 454-point dip on Monday showed how quickly sentiment shifts. Investors following the deal can also read our guide to investing in the Pakistan Stock Exchange, track the SECP’s ongoing probe into SE Fruits IPO discrepancies, and follow Punjab’s Rs1.995 trillion industrial and export plan for the wider industrial picture.
What investors should watch
For investors tracking PSX-listed LOTCHEM, EPCL and ENGRO, the clearance removes a key uncertainty. The deal changes who owns and controls one of Pakistan’s flagship chemical producers, while leaving its factories, capacity and market position unchanged. The next milestones are the completion of remaining conditions and the formal transfer of shares, which will confirm the timeline for the new ownership to take effect.
Frequently asked questions
What did the CCP approve?
The commission approved Lotte Chemical Pakistan’s proposed acquisition of a shareholding in Engro Polymer & Chemicals from Engro Corporation, following a Phase-I competition assessment.
Why did the CCP allow the deal?
Lotte Chemical does not operate in PVC, caustic soda or hydrogen peroxide, and neither it nor its group companies buy from Engro Polymer. The CCP therefore found no horizontal or vertical overlap.
How big is the Lotte-Engro Polymer deal?
Engro Holdings agreed in September to sell about 56.19% of EPCL to Lotte Chemical Pakistan for approximately Rs19.7 billion, or Rs38.6 per share, subject to regulatory approvals.
Is Engro Polymer Pakistan’s only PVC maker?
Yes. The CCP’s assessment confirmed that Engro Polymer is the country’s sole domestic manufacturer of PVC, though imports provide meaningful competition in the market.
